Monthly Archives: August 2013

Since the nuclear accident at the Fukushima nuclear power facility in Japan two and a half years ago Accountability Central has been tracking carefully the response from the Japanese government and Tokyo Electric Power, the owner/operator of the site. Despite some very heroic efforts by individual company employees and local managers, the overall company and government response has been subpar and bordering on disastrous.

The greater concern appeared for months to be evading blame and official apologies than addressing solutions to the problem. The withholding of information from the public has at times been shocking. Caused by a huge earthquake off the coast of Japan, followed by a devastating tidal wave that destroyed coastal areas in and around the plant site, this event is being called the greatest peacetime nuclear disaster ever.

Every week there appear more and more stories about the depth and seriousness of the event and its increasing impact on the people and environment of Japan and the entire Pacific Rim and beyond. Just a few days ago it was announced that 300 tons of nuclear contaminated water used to cool the plant to avoid a complete meltdown has been escaping into the ocean …each day.!

A member of an independent committee reviewing the event recently stated that the group “…agreed on one thing: that the damage being caused by the crippled No. 1 nuclear plant is far worse than government officials cared to acknowledge. “It’s time we faced the danger,” said Takashi Hirose, a writer shocked by the under-reported radiation levels he found on recent trip into the evacuation zone. “So many terrible things are not being reported in the news.”

While the Japanese response to the Fukushima event might be rooted in cultural traditions, its impact on the nation and potentially the entire world warrants greater scrutiny.

“The world is passing through troublous times. The young people of today think of nothing but themselves. They have no reverence for parents or old age. They are impatient of all restraint. They talk as if they knew everything, and what passes for wisdom with us is foolishness with them. As for the girls, they are forward, immodest and unladylike in speech, behavior and dress.“ I once thought this was written 20 centuries ago by Plato quoting Socrates, but on researching it for this blog I found it more recently had gained recognition in a Forbes article or even in an Ann Landers column….its origin is murky.

But the point is that criticism of young people goes way back in time…way way back… with each generation critical of the younger for its such things as its attitude, dress and demeanor.

Last week an article appeared in Accounting Weboutlining a study of Ethics among several generations conducted by the Ethics Resource Center. I found it of great interest.

The study contrasted the views of these groups on the matter of ethics. First they described them in these terms” The four generational groups examined in the survey are Traditionalists, Baby Boomers, Generation X workers (Gen Xers), and Millenials or Generation Y workers (Gen Yers). Traditionalists, born 1925–1945, are hardworking, respectful of authority, and value loyalty. Baby Boomers, born 1946–1964, are hardworking, idealistic, and committed to harmony. Gen Xers, born 1965–1980, are entrepreneurial, flexible and self-reliant, and comfortable with technology. Millennials, born 1981–2000, are tech-savvy, appreciative of diversity, and skilled in multitasking.”

They then contrasted the various generations’ views on ethics…not critical but just as pure observers. The prime difference was this: The study found that the youngest workers are significantly more likely than their older colleagues to feel pressure from others to break ethical rules because the pressure “eases as workers spend more time in the workforce and learn ways of coping with their work environment.”

Basically, peer pressure to break the rules is strongest in the younger workers.

The lessons of ethics appear not to be instilled prior to entering the workforce. Schools, colleges and the family unit do not seem to be teaching the importance of following rules and in being ethical. The influence of peers is stronger than that of society…rules are to be questioned and adherence is selective.

As a member of the Baby Boomer generation, that attitude does worry me, but it is the same mantra as “don’t trust anyone over thirty” or “question all authority.” (Remember those from the 1960s?) It gives food for thought and debateon what is being taught within the family unit and through the educational process by Baby Boomers and Gen Xers.

Certainly the ultimate Sustainability is the extension of the life cycle — so we mere humans could live to 125 or 150 years of age, for example. But is this something we really want to do? A recent Pew Research Center Study explored peoples’ opinions on living longer and the results might surprise you. In the Washington Postarticle Americans sharply divided about dramatically extending human lifespan, the poll finds there are interesting divides which raise all types of societal, ethical and religious issues.

“… fifty-six percent of Americans say they would personally not want treatments that would allow them to live dramatically longer lives…”

Some of the reasons given include, a drain on natural resources, negative impact on the economy, boredom and even “social, political, economic, environmental, moral and other questions, including on concepts of marriage, parenting and the gap between rich and poor…” (What might your reasons be if you agree with these views?)

One of the issues that seemed to escape the respondents is the state of one’s health during that extended life. If in the last 40 years of your life you would be physically and mentally in the shape of a current 90 year old, that prospect might not be very pleasant. Poor health in old age can be something that most people would not like to experience for an additional 25 to 50 years. But scientists quoted in the article indicate that health standards would be vastly improved and longer life would provide better health through the life-span.

Religious leaders also brought into the discussion with some musing that delaying the dying process takes away the opportunity to be with God.

My take is simple…I would like to live longer, as long as I was healthy and above all not bored. You would have to evolve a new value system, like writing a bucket list that would last 25-40 years…..and buying cars that would last 15-25 years (Detroit — are you listening?). And work at living a longer life with purpose and dignity. I love what I am doing right now – sharing news and commentary from around the world with our readers. And could continue doing it for another 25-30 years.

Read the article and the study. There are many other interesting results for the ultimate sustainability…a longer life.

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The Global Reporting Initiative (GRI) in collaboration with KPMG, UNEP, Centre for Corporate Governance in Africa and various stakeholders from each country studied recently released the third edition of the “Carrots & Sticks” publication. This important publication analyzes the growing number of national and international reporting policies and guidance from around the world.

The first edition of Carrots and Sticks covered developments in 19 countries; the second, 32 countries: This third edition covers 45 countries and regions. In the seven years of the series, the amount of policy and regulation has markedly increased. This includes a notable increase in the number of mandatory reporting measures. In 2006, 58 percent of policies were mandatory; now, more than two thirds (72 percent) of the 180 policies in the 45 reviewed countries are mandatory

The Governance & Accountability Institute’s Hank Boerner (Chairman and CEO) and Louis Coppola (Executive Vice President) assisted GRI with developing the United States content section in the report. A Fellow of the G&A Institute – Linda Lowson of CSR Insights – provided additional support and invaluable input into the US regulatory environment.

Among the current regulations and policies discussed by G&A in the US section are:

Dodd-Frank Act, 2010

Presidential Executive Order 13514

Regulation S-K, 2010

EEO-1 Survey

Sarbanes-Oxley Act, 2002

Clean Air Act (CAA) and Clean Water Act (CWA)

The Toxic Release Inventory (TRI)

California Transparency in Supply Chains Act, 2010

USEPA Proposed Mandatory Greenhouse Gas Reporting Rule

In the future we are sure to see this trend of Sustainability reporting regulations and policies increasing. As countries begin to develop their own policies around this important subject this research can be very useful in learning by example.

Based on the report the major developmental trends around the world were:

Continued and growing interest in regulation, including corporate governance and disclosure requirements.

An increase in the number of countries becoming involved in the sustainability reporting policy arena, including developing countries.

An increasing number of policies inspired by or based on a ‘report or explain’ approach.

Growing reference to existing sustainability and reporting frameworks, and the continuing emergence of new frameworks.

A consistent focus on large and state-owned companies, yet voluntary reporting by SMEs is increasing.

Sustainability reporting has become a listing requirement on several stock exchanges in non-OECD countries.

The United Nations is now also asking governments to stimulate sustainability reporting by developing best practice and smart regulation.

In their introduction of policies, regulation and guidelines, governments are striving to harmonize the use of multiple frameworks.

Jamie Reinhardt currently works at the Governance and Accountability Institute in NYC, New York. She is working as a Global Reporting Initiative report analyst and exploring different trends in GRI reports from S&P 500 companies. As an MBA-candidate at Baruch College, Jamie is the president of the Sustainable Business Club, which is Baruch’s Net Impact chapter. Previously, she worked for the Center for Creative Leadership on the Latin American Intern Initiative and for an international shipping company in operations and logistics. She hopes to combine her past and present experiences to make a real difference in the future with regards to sustainability in the corporate environment.

New York’s Stone Barns Farm and Restaurant … Worth a visit!

As part of my work this summer on a sustainable development project, I visited a farm called Stone Barns outside of NYC. Stone Barns is an education center for food and agriculture, as well as a working farm. A colleague and I took a train that runs along the Hudson River up to the farm’s location in Pocantico, NY. It’s hard to believe that only 25 miles outside of Manhattan you can find such a pristine natural setting.

Driving up to the entrance of Stone Barns is beautiful. The green rolling pastures are laid out in front of you and the main structure is a barn made out of stone, hence the name. The main building is gorgeous. It looks like original old stone, but the structure is well kept and has been updated so that it is very modern inside. There is a large open courtyard in the middle which was full of school children at the time we were there, since a huge part of their mission is to teach young kids where their food actually comes from. My colleague told me a story about how one of her friend’s children refused to eat carrots from a farmers market since they were dirty and “from the ground”. The child wanted to go get the “clean” carrots from the store. I’m pretty sure I had similar feelings when I was a child which only shows how important Stone Barns’ mission to educate children, really is.

“There is a disconnect that exists between the food we eat and its origins that needs to change in order for us all to live sustainable and healthy lifestyles.”

— Jamie Reinhardt

There are two restaurants, Blue Hill Cafe and Blue Hill at Stone Barns, on the premises that are farm-to-table and absolutely delicious. You can taste the freshness in the food that has surely just been picked not long before it showed up on your plate. As well as the fabulous restaurant, the farm is completely open to the public and you can take your own self-guided tour to visit the green houses and animals. The staff is extremely friendly and was happy to

give us a tour of the chicken areas and give us tips on how to raise sustainable chickens both for meat and for eggs. All of their animals seemed very healthy and are well cared for. When we arrived at the main chicken area, where they have egg mobilesto ensure the chickens’ happy and healthy lifestyle, the whole flock ran over to check us out. I have never seen so many friendly chickens! It was a true testament to the kindness and care of the farmers at Stone Barns.

I could talk about this place and our trip so much more, as it was such a positive experience, but I really suggest that you take a visit yourself if you are ever in the NYC area. At least check out their Sunday farmers market to buy some of their delicious, organic produce and meat. It’s a positively lovely way to spend the day.

The support for coal throughout the world is in great flux. There are negative messages flying about driven by the desire to decrease the impact on climate change and the overall environment by decreasing the use of this high carbon fuel.

Today’s story in Eco Business.com — Coal at risk as global lenders drop financing on climate — focuses on the financing of future coal power plants and related coal projects: “First it was President Barack Obama pledging in June that the government would no longer finance overseas coal plants through the U.S. Export-Import Bank. Next it was the World Bank, then the European Investment Bank, dropping support for coal projects. Those banks have pumped more than US$10 billion into such initiatives in the past five years.”

While the future of coal has been shaky for years, there was no viable cost-effective substitute until fracking caused the boom in natural gas production. A classic battle is looming between efforts to protect the environment and the loss of an industry and jobs. While there are deniers, the conflict is growing.U.S. is not waging ‘war on coal’: Energy Secretary Moniz .

Balance these events with efforts by representatives of “coal producing states” fighting for an industry that supplies thousands of jobs in their home communities. W.Va. entourage meets with new EPA director .While coal-fired power plants in the US just may go the way of the dinosaurs in the near future. Usage around the world is not expected to decrease as rapidly and might even increase, especially in emerging economies.

The coal issue is a perfect example of what will become an increasing conflict between a greener more sustainable energy policy and job protection for the status quo. We will be watching these issues very closely. For coal interests it is not over until it is over!

One of the largest public employee pension funds in the USA is the California State Teachers’ Retirement System (CalSTRS), which has US$160 billion in Assets Under Management and serves 800,000 beneficiaries. As the fund managers say, “We have an obligation to be responsible stewards of the retirement funds of California’s educators.” And corp gov activists they are!

That includes being an activist and engaged institutional investor and focusing on issues [critical to fund managers] when CalSTRS engages with companies in the investment portfolio. The fund just issued its very first Corporate Governance Annual Report(2013), which explains investment policies, governance philosophy, partnerships (example, with the Council of Institutional Investors/CII, the fund’s trade association; Ceres; UN Principles for Responsible Investment/PRI, of which CalSTRS is a signatory, Investor Network on Climate Risk/INCR, a project of Ceres); and an explanation of corporate engagements.

Issues in focus for corporate engagement discussions include Exec Comp, Say on Pay; Majority Vote Standards; Diversity of Boards; and (of course) Sustainability. The fund is an activist in filing and supporting other investors’ sponsored shareholder resolutions at proxy voting time.

In 2012 CalSTRS voted nearly 7,000 meetings — 3,000 U.S.A. and 4,000 non-US companies in portfolio. Some 24,000 proposals were considered for the US companies and double that for non-US companies.

CalSTRS believes that “good governance contributes to better long-term sustainable performance. Asset managers hired by CalSTRS take large positions in companies and are required to be active in engaging with boards and senior management to “undertake value-driving change…” Eight partnerships with asset managers are identified in the report.

Matthew Scott, Editor of Corporate Secretaryin his timely and information email newsletter is informing his audience of influencers – corporate secretaries – of the CalSTRS governance report and suggesting that this is one way for board governance influential to better understand the large public fund’s focus on corporate engagements. He characterized the report as “a definitely a positive development for the corporate governance industry…”) You can contact Matthew at Corporate Secretary magazine (Cross Border Publications) and follow him on Twitter – @corpsecmag